February 2013: Economic sentiment keeps rising in the EU and the euro area

In February the Economic Sentiment Indicator (ESI) continued its recovery that has started in October/November of last year. The marked improvement by 1.6 points in the euro area (to 91.1) and 1.2 points in the EU (to 92.0) was driven by increases in industry and services. Consumer confidence also improved marginally. Retail trade and construction, on the other hand, booked moderate decreases. Amongst the seven largest Member States, economic sentiment improved in Germany (+2.5), Spain (+1.5), France (+1.3), the Netherlands (+0.8), Poland (+0.5) and Italy (+0.3). UK sentiment slightly slipped (-0.5).

Economic sentiment indicator (s.a.)

February EU: 92.0 - Euro Area: 91.1

Continuing the broad upward trend observed since November, industry confidence improved in the euro area (+2.6) and the EU (+2.2), fuelled by a much more positive assessment of production expectations and the current level of overall order books. The assessment of stocks of finished products improved less significantly (EU) or remained unchanged (euro area). The past production and the current level of export order books, which are not included in the confidence indicator, were also assessed much more favourably. Also services confidence continued the upward trend it has been following since October. The increases, marked in the euro area (+2.3) and more moderate in the EU (+0.9), were the result of sharp improvements in managers' assessment of the past business situation, and – to a lesser extent - their views on past demand. Managers' demand expectations improved in the euro area, while deteriorating in the EU. Confidence in retail trade decreased somewhat in the EU (-0.8) and the euro area (-0.5), driven by a worsened assessment of the present business situation and the current volume of stocks (EU) and business expectations (euro area). Confidence in construction decreased slightly in the EU (-0.4) and, more markedly, in the euro area (-1.3). While the assessment of order books worsened in both areas, employment expectations deteriorated in the euro area but became somewhat less pessimistic in the EU.

Employment plans were mildly revised downwards in services and, more sharply, in retail trade. At the same time, employment plans in industry were revised slightly upwards in the euro area, with no changes for the EU. Selling price expectations got more pessimistic in industry, services and retail trade, while they were revised upwards in construction.

Consumer confidence increased marginally in the euro area and the EU (+0.3). Consumers were more positive about the future general economic situation, while more negative about their savings expectations over the next 12 months. Euro area consumers got less pessimistic about the future financial situation of their households and more pessimistic regarding unemployment expectations. In the EU, the assessment of these variables barely changed.

Financial services confidence (not included in the ESI) rose in the EU (+1.4) and the euro area (+0.8). The past business situation was assessed more negatively, past demand and demand expectations more positively.

Industrial confidence indicator (s.a.)

February EU: -10.8 - Euro Area: -11.2

Service confidence indicator (s.a.)

February EU: -6.0 - Euro Area: -5.4

Consumer confidence indicator (s.a.)

February EU: -21.6 - Euro Area: -23.6

Retail trade confidence indicator (s.a.)

February EU: -10.2 - Euro Area: -16.0

Construction confidence indicator (s.a.)

February EU: -30.3 - Euro Area: -29.8

Financial services confidence indicator (n.s.a.)

February EU: 5.9 - Euro Area: -2.4

The next Business and Consumer Survey is due to be published on 27 March 2013.